Short Summary

With the continued fall in the value of the Italian lira, Yugoslavians have been flocking over the border into Italy on shopping sprees, designed to benefit form the currently favourable rate between the Italian currency and their own - the dinar.

Background: With the continued fall in the value of the Italian lira, Yugoslavians have been flocking over the border into Italy on shopping sprees, designed to benefit form the currently favourable rate between the Italian currency and their own - the dinar.

During the weekend (8-9 May) queues of cars built up on the Yugoslavian side of the border at such places ad Feretici, and sometimes the queues stretched for several miles. The shoppers made for such centres as Trieste and Gorizia and other border towns.

The official exchange rate was 50 lira for one dinar, and many Italian shops were offering Yugoslavians between 45 and 48 lira for a dinar. Only a matter of weeks before the dinar was worth just 33 lira.

On Friday (7 May) all the Italian banks were ordered to convent incoming foreign currencies into lira within seven days. The order was given by the Bank of Italy following the introduction two days previously of import restrictions by the Government in an attempt to halt the lira's slide on the world money markets.

Banks could previously wait for 15 days before converting foreign currencies into Lira, thus showing a profit to the detriment of the Italian currency. However, the Lira, which had lost more than one-third of its value since mid-January, began to strengthen following the announcement of the import restrictions.

SYNOPSIS: Yugoslavian motorists were queuing up over the weekend to cross the border into Italy. They were not intending to escape the rigours of the Communist system, but wee merely hoping to take advantage of the current weakness of the Italian economy which has caused the lira - the Italian currency - to lose a third of its value since mid-January. It was a shopping spree for the Yugoslavs.

The shoppers made for such centres as Trieste and Gorizia and other border towns. While the official exchange rate was 50 lira for one dinar, many Italian shops were offering between 45 and 48 lira to the dinar. Weeks before, the dinar was worth 33 lira.

On Friday, all Italian banks were ordered to convert incoming foreign currencies into lira within seven days. The order was given by the Bank of Italy following the introduction of Government import restrictions in an attempt to halt the lira's slide on world money markets. Banks could previously wait for 15 days before converting foreign currencies into lira, thus showing a profit to the determent of the Italian currency.